Opinion
No. 7810SC777
Filed 6 February 1979
Elections 15 — insurance company's contributions to "John Ingram Breakfast" — no violation of statutes An insurance company's contribution of money for an appreciation breakfast for John Ingram after his reelection as Commissioner of Insurance of North Carolina did not violate criminal statutes prohibiting the payment of money by insurance companies for or in aid of any political organizations or candidates or for "any political purpose whatsoever" G.S. 163-270 and G.S. 163-278.19 (a).
APPEAL by the State of North Carolina from Preston, Judge. Order entered 11 July 1978 in Superior Court, WAKE County. Heard in the Court of Appeals 6 December 1978.
Attorney General Edmisten by Associate Attorney Christopher P. Brewer, for the State.
Cansler, Lockhart, Parker Young, by Joe C. Young and Bruce M. Simpson, for defendant appellees, Charlotte Liberty Mutual Insurance Company and George Talbot.
McCoy, Weaver, Wiggins, Cleveland Raper, by Richard M. Wiggins and Donald W. McCoy, for defendant appellees, Mid-South Insurance Company and Walter Burns Clark.
Judge MARTIN (Harry C.) dissenting
The facts in this case are undisputed. Defendant George Talbot, President of defendant Charlotte Liberty Mutual Insurance Company, received an invitation in the mail, after the reelection of Ingram as Commissioner of Insurance of North Carolina, which read:
"You are Invited to Join Commissioner and Mrs. John Ingram Buffet Breakfast Saturday, January 8th, 1977 Eight O'clock-Nine Thirty O'clock a.m. Velvet Cloak Inn, Raleigh, North Carolina"
No further invitation or contact was received. While he was seated at the breakfast, defendant Talbot was asked to make a contribution to help pay the cost of the breakfast. Mr. Talbot stated that he only had a company check and asked if it would be all right to use it. He was told that it would be all right to use a company check, because the breakfast was not a political function. Mr. Talbot then wrote a $500.00 check to "John Ingram Breakfast" on the account of Charlotte Liberty Mutual Insurance Company. The check was listed on the books and records of the company, just as written, under company contributions. No attempt has ever been made to hide the check or the fact of its existence.
On 11 April 1978, the State obtained criminal summons charging the defendants with violating G.S. 163-270 and G.S. 163-278.19 (a).
The facts relating to defendants Walter Clark and Mid-South Insurance Company are essentially the same. Defendant Clark, President of defendant Mid-South Insurance Company, received an invitation to attend the appreciation breakfast for John Ingram, who had been elected and certified as Commissioner of Insurance of North Carolina. Defendant Clark was contacted by telephone three times before the breakfast and was asked whether he would contribute money to defray the expenses of the breakfast. Five hundred dollars was the amount suggested. After being assured that it was not a political function, Clark sent a company check for $500.00 to "John Ingram Appreciation Breakfast" from Fayetteville to Mr. Howard Bloom in Roanoke Rapids.
On 11 April 1978, the State filed criminal summons charging the defendants Clark and Mid-South Insurance Company with violating G.S. 163-270 and G.S. 163-278.19 (a). All of the defendants moved to quash the summons on the grounds that either (1) the summons failed sufficiently to charge a criminal offense, or (2) the summons in each case charged violations of statutes which are unconstitutional as applied. The motions to quash were granted on both grounds by District Court Judge Winborne. On appeal to the Superior Court, Wake County, Judge Preston affirmed.
The State appeals pursuant to G.S. 15A-1445 (a)(1).
The appellant contends that the Superior Court erred in affirming the District Court's order to quash the criminal summons, because the statutes involved are (1) constitutional on their face, (2) constitutional as applied, and (3) proscribe the conduct alleged in each summons. We hold that the summons in each case fails sufficiently to charge a criminal offense under G.S. 163-270 or G.S. 163-278.19 (a).
G.S. 163-270 provides in relevant part:
"163-270. Using funds of insurance companies for political purposes. — No insurance company or association, including fraternal beneficiary associations, doing business in this State shall, directly or indirectly, pay or use, or offer, consent or agree to pay or use, any money or property for or in aid of any political party, committee or organization, or for or in aid of any corporation, joint-stock company, or other association organized or maintained for political purposes, or for or in aid of any candidate for political office or for nomination for such office, or for any political purpose whatsoever. . . An officer, director, stockholder, attorney or agent for any corporation or association which violates any of the provisions of this section, who participates in, aids, abets, advises or consents to any such violation, and any person who solicits or knowingly receives any money or property in violation of this section, shall be guilty of a misdemeanor, and shall be punished by imprisonment for not more than one year and a fine of not more than one thousand dollars ($1,000)."
G.S. 163-278.19 (a) provides in relevant part:
"163-278.19. Violations by corporations, business entities, labor unions, professional associations and insurance companies. — (a) Except as provided in G.S. 163-278.19 (b), it shall be unlawful for any corporation, business entity, labor union, professional association or insurance company directly or indirectly:
(1) To make any contribution or expenditure (except a loan of money by a national or State bank made in accordance with the applicable banking laws and regulations and in the ordinary course of business) in aid or in behalf of or in opposition to any candidate or political committee in any election or for any political purpose whatsoever;
(2) To pay or use or offer, consent or agree to pay or use any of its money or property for or in aid of or in opposition to any candidate or political committee or for or in aid of any person, organization or association organized or maintained for political purposes, or for or in aid of or in opposition to any candidate or political committee or for any political purpose whatsoever . . ." (Emphasis added.)
G.S. 163-270 and G.S. 163-278.19 (a) are both located in Chapter 163. G.S. 163-270 is located in Article 22, Subchapter VIII of Chapter 163, entitled "Corrupt Practices and Other Offenses Against the Elective Franchise." G.S. 163-278.19 (a) is located in Article 22A, Subchapter VIII of Chapter 163, entitled "Regulating Contributions and Expenditures in Political Campaigns." When as here, the meaning of a statute is in doubt, reference may be had to the title and context as legislative declarations of the purpose of the act. Porter v. Yoder Gordon Co., 246 N.C. 398, 98 S.E.2d 497 (1957).
In Louchheim, Eng People v. Carson, 35 N.C. App. 299, 304, 241 S.E.2d 401, 404-05 (1978), we perceived the purpose of G.S. 163-278.19 to be identical to those of its federal counterpart. We said:
"The purpose of the federal statute regulating campaign contributions and expenditures by corporations and labor unions, 2 U.S.C. § 441 (b) (1976) (formerly 18 U.S.C. § 610), which is similar in its language and scope to our own statute, is to protect the populace from undue influence by corporations and labor unions, and to insure the responsiveness of elected officials to the public at large. United States v. C.I.O., 335 U.S. 106, 92 L.Ed. 1849, 68 S.Ct. 1349 (1948); Annot., 24 A.L.R. Fed. 162 (1975). As we read G.S. 163-278.19, we perceive its purposes to be identical to those of its federal counterpart. Our Legislature, as well as Congress, has specified that the advance of money by a corporation in behalf of a political candidate is frustrative of these purposes."
In Louchheim, supra, campaign contributions expressly prohibited by G.S. 163-278.19 were in question. In the instant case, no campaign contributions are involved. Mr. Ingram's election had been certified at the time of the contribution; he was not a candidate for political office.
G.S. 163-278.6 (4) defines a candidate as follows: "The term `candidate' means any individual who has filed a notice of candidacy for public office listed in G.S. 163-278.6 (18) with the proper board of elections."
Nothing else appearing, the Legislature is presumed to have used the words of a statute to convey their natural and ordinary meaning. Transportation Service v. County of Robeson, 283 N.C. 494, 196 S.E.2d 770 (1973); In re Trucking Co., 281 N.C. 242, 188 S.E.2d 452 (1972).
The State contends that defendants' conduct in the instant cases fall within the ambit of the prohibitions of G.S. 163-270 and G.S. 163-278.19 (a) because of the words employed in both statutes prohibiting the payment of money by insurance companies or their agents for any political purpose whatsoever.
Statutes creating penal offenses must be strictly construed. State v. Ross, 272 N.C. 67, 157 S.E.2d 712 (1967); In re Dillingham, 257 N.C. 684, 127 S.E.2d 584 (1962). See also Schwartz v. Romnes, 495 F.2d 844 (2d Cir. 1974); State ex rel. Wright v. Carter, 319 S.W.2d 596 (Mo.App. 1958). The doctrine of ejusdem generis is applicable here. The doctrine of ejusdem generis requires that general words of a statute which follow a designation of particular subjects or things be restricted by the particular designations to things of the same kind, character, as nature and those specifically enumerated. In re Dillingham, supra, accord, Schwartz v. Romnes, supra.
After applying the doctrine of ejusdem generis in a similar statute, the Second Circuit Court of Appeals, in Schwartz, supra, noted the statute's purpose:
"Thus the avowed objective was not to bar all corporate expenditures with respect to legislative matters generally but to prohibit corporate contributions to candidates or parties, since such contributions might tend to create political debts . . ." 495 F.2d 844, 850 (2d Cir. 1974).
Our Legislature had a similar purpose in enacting G.S. 163-278.19 (a). See Louchheim, supra. We hold that the criminal summons fail to state an offense within the ambit of these statutes. We note the recent enactment in 1977 of G.S. 163-278.36 in rendering our decision. The statute provides:
"163-278.36. Elected officials to report funds. — All contributions to, and all expenditures from any `booster fund,' `support fund,' `unofficial office account' or any other similar source which are made to, in behalf of, or used in support of any person holding an elective office for any political purpose whatsoever during his term of office shall be deemed contributions and expenditures as defined in this Article and shall be reported as contributions and expenditures as required by this Article. The annual report shall show the balance of each separate fund or account maintained on behalf of the elected office holder."
G.S. 163-270 and G.S. 163-278.19 (a) are directed at an evil other than the one presented here. There is no showing of any attempt to influence an elected official. The fact that a particular activity may be within the same general classifications and policy of those covered does not necessarily bring it within the ambit of the criminal prohibitions involved here. See United States v. Boston Maine R.R., 380 U.S. 157, 13 L.Ed.2d 728, 85 S.Ct. 868 (1965); accord, State v. Terre Haute Brewing Co., 186 Ind. 248, 115 N.E. 772 (1917).
Our holding that the summons in these cases fail sufficiently to charge an offense within the ambit of these statutes dispenses with the need to resolve the constitutional challenges raised by defendants.
The order entered below is
Affirmed.
Chief Judge MORRIS concurs.
Judge MARTIN (Harry C.) dissents.